Process Excellence Demystified

Date: 22/10/2018
Author: Hoshin Kanri Advisory Ltd
Company: Hoshin Kanri Advisory Ltd

What is a Process?

"A business process is defined as a set of activities and tasks that, once completed, will accomplish an organisational goal."

Processes may be planned or unplanned. A process prepared by humans has a purpose. It is a course of action, or a procedure, to achieve a result or an end-product. Typical examples of business processes are receiving orders, invoicing, shipping products, updating employee information, or setting a marketing budget.

The challenge for the organisation is to make sure the processes are running as efficiently as possible. There are some days when everything goes according to plan, and we have everything on our to-do list ticked, and we have done more and yet there are days when things do not go according to plan. It is the same with business processes, why is there a variation from day to day? How do we know that a process is efficient or not? Here are few examples to identify issues with your business processes

Typical questions you need to ask  yourself to recognise problems with processes

  • Should one person be doing what two people are currently doing?
  •  Are the right people with the right skills in the right jobs?
  • Are there bottlenecks and sticking points in the process? 
  • Could a computer manage a task more efficiently than a human? 

How does an inefficient process manifest itself?

  1. Length of time it takes to complete a job If you're employing someone by the hour and it makes them twice as long as it should to complete a task, you should look at increasing efficiencies. Increased efficiency means that you can serve more customers in the same amount of time. If you find that you're often working late into the night on your business, you may be the one who needs to streamline your processes. Efficiency has been the driving force of the most successful companies from Ford to Uber.
  1. Loss of Profit – if you're wasting time, you're losing money. Money spent on paying resources on wasted time, doing activities that do not add value to your customers that customers are unwilling to pay. It ultimately leads to the reduction in profit margin.
  1. Are your results from your processes always inconsistent?.

Do you have a system that accurately captures the exact steps of the processes and it gives the same expected results every time it is executed?

Is the process explicit, so team members intuitively understand how to use it? How much of the process is automated and how much is manual? If your answers are no to all these questions, then your processes are inefficient.

Fast food chains like McDonald's can replicate their model so efficiently because they have efficient processes that produce results that are repeatable and hence they are scalable.

  1. Stress & Dissatisfaction

A recent survey indicates that 33% of UK workers are leaving their current job for a new position due to frustrations around operational inefficiency. Lengthy approval cycle times and outdated way of thinking are the primary cause of dissatisfaction.

 

  1. Unhappy Customers

Often unhappy customers are not just a result of rude and unattentive employees, poor customer experience due to poor processes, poor communication, or inadequate training.  In all these cases of these process type issues, the fault lies with the business. These types of problems have a significant impact on customer experience, brand loyalty and revenues.

Poor customer satisfaction leads to loss of customers, damage to reputational damage and reduction in sales and profitability.

Simple steps to process improvement that you can make today!

  1. Start Small. Sometimes it’s best to start small: putting in a change that will make a big difference in improving someone’s working day (for example by taking a process they hate and making it much easier, or giving it to someone who enjoys it) will build trust in the changes you are proposing.
  2. Do a Thorough Investigation. The reason that many businesses fail to identify all of their issues is that they only skim through the surface and find one or two points, and then consider the process done. When you are investigating issues, it is essential to find all of the possible items you can. Get all your relevant staff involved in the process of identifying problems, pull out all their ideas and have a complete list before moving onto another.
  1. Simplify and Eliminate. Processes that divide the attention and focus of a worker are rarely efficient. Simplifying tasks by eliminating unnecessary or unrelated components can ensure that workers are more effective, focused, and able to optimise their productivity.
  1. Automation. Automate what you can. It is not necessary that every organisation has to start with RPA or AI, automation can begin with a simple spreadsheet, simple software application for invoicing, shipping, accounting and employee management.
  1. Make the benefits of the process clear! Make sure that the benefits are clear to all involved: if someone says they don't understand why he or she are doing something, you need to make sure he or she knows the objectives.
  2. Communicate, communicate, communicate. If people know why something is happening, they will feel more engaged with the process and help to make it happen.
  3. Review any new changes to the processes with individual employees and teams. Also, give equal importance to the people who oppose a process change as they may have a valid point. Involve everyone in the decision-making process.

For more lasting and dramatic changes to bottom-line results and benefits use lean six sigma methodology, tools and techniques.

In the next article, we will discuss some easy lean tools and techniques that will help to identify wastes in the processes.